“Their tax department is even more innovative than their product designers.”

The big technology story in New Zealand this weekend is about Apple's tax bill. Or rather, the lack thereof.

The electronics giant sold $4.2 billion (NZD) worth of
products in New Zealand, but it didn't pay any local tax at all. That's
according to a Saturday report from the New Zealand Herald.
Apple did pay $37 million in income tax based on its New Zealand sales,
but it paid that money to the Australian government, since that's where
the New Zealand operation is run from.

The arrangement to send the tax on New Zealand profits to
Australia has been in place since at least 2007. Experts confirmed the
arrangement is legal under New Zealand law.

"They're operating completely legally," said Deborah
Russell, a university lecturer who was recently selected to be a
candidate in the New Zealand Labour Party. "It's just that age-old
distinction between legality and morality."

John Payne, a spokesman for a New Zealand business lobby
called the Corporate Taxpayers Group, said the same tax techniques used
by Apple are used by local exporters.

"It's Tax 101 in terms of activity," Payne told the
newspaper. "And it's quid pro quo for us when we're operating similarly
in another country."

The Herald calculated that, if Apple had "reported the same healthy
profit margin in New Zealand as it did for its operations globally," it
would have paid $356 million NZD in taxes.

"Apple aims to be a force for good, and we're proud of the
contributions we've made in New Zealand over the past decade," an Apple
Australia representative told the newspaper. "Because our products and
services are created, designed, and engineered in the US, that's where
the vast majority of our tax is paid."

In an accompanying editorial, the Herald
acknowledged that, since Apple's production, design, and research all
take place far away, "it is understandable that our slice" of tax
revenue "may be small."

"But, in fairness, it must be more than zero," the Herald continued, "The amount we reveal today that Apple has been shown to pay to Inland Revenue in income tax."

"I really like Apple products—they're incredibly
innovative—but it looks like their tax department is even more
innovative than their product designers," said James Shaw, one of the
leaders of New Zealand's Green Party.

In August, European competition chief Margrethe Vestager said that the sweetheart deal Apple got from Ireland constituted illegal state aid to a corporation and that Apple should be compelled to pay €13 billion ($14.5 billion) in back taxes.

Apple sold $4.2 billion of product in New Zealand, paid $0 local taxes
Reviewed by Bizpodia
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